Dominant position

A firm is in a dominant position if it has the ability to behave independently of its competitors, customers, suppliers and, ultimately, the final consumer. A dominant firm holding such market power would have the ability to set prices above the competitive level to sell products of an inferior quality or to reduce ts rate of innovation below the level that would exist in a competitive market. Under EU competition law, it is not illegal to hold a dominant position, since a dominant position can be obtained by legitimate means of competition, for example by inventing and selling a better product. Instead, competition rules do not allow companies to abuse their dominant position. The EU merger control system (merger control procedure) differs insofar from this principle, as it prohibits merged entities from obtaining or strengthening a dominant position by way of the merger. A dominant position may also be enjoyed jointly by two or more independent economic entities being united by economic links in a specific market. This situation is called collective (or joint or oligopolistic) dominance. As the Court has ruled in Gencor, there is no reason in legal or economic terms to exclude from the notion of economic links the relationship of interdependence existing between the parties to a tight oligopoly within which those parties are in a position to anticipate each one another’s behaviour and are therefore strongly encouraged to align their conduct in the market.

A dominant firm is one which accounts for a significant share of a given market and has a significantly larger market share than its next largest rival. Dominant firms are typically considered to have market shares of 40 per cent or more. Dominant firms can raise competition concerns when they have the power to set prices independently.

An industry with a dominant firm is therefore often an oligopoly in that there are a small number of firms. However, it is an asymmetric oligopoly because the firms are not of equal size. Normally, the dominant firm faces a number of small competitors, referred to as a competitive fringe. The competitive fringe sometimes includes potential entrants. Thus the dominant firm may be a monopolist facing potential entrants.

Like a monopolist, the dominant firm faces a downward sloping demand curve. However, unlike the monopolist, the dominant firm must take into account the competitive fringe firms in making its price/output decisions. It is normally assumed that the dominant firm has some competitive advantage (such as lower costs) as compared to the fringe.

The term competitive fringe arises from the basic theory of dominant firm pricing. It is generally assumed that the dominant firm sets its price after ascribing a part of the market to the competitive fringe which then accepts this price as given.

Dominant firms may be the target of competition policy when they achieve or maintain their dominant position as a result of anti-competitive practices. (...)

The Commission for the Protection of Competition announces that it has notified Statements of Objections to Henkel AG & Co KGaA and its subsidiary GPM Henkel Ltd jointly and severally regarding a prima facie infringement of Section 6(1)(b) of the Protection of Competition Laws of 2008 and (...)

No dominant market power among online video streaming platforms*
The Netherlands Authority for Consumers and Markets (ACM) has conducted a market study into online video platforms such as YouTube, Facebook, Netflix, and Dumpert. ACM did not find any indications for anticompetitive risks on the (...)

This case note analyses the decision of the Turkish Competition Authority (TCA) in which it has decided that the worldwide manufacturer of luxury sunglasses, Luxottica, abused its dominant position it held in the market for the wholesale of branded sunglasses by its rebate schemes which include (...)

Sugar production / Picardie*
Tereos takes commitments under the French competition authority that it will open up its procurement contracts. Sugar beet growers will benefit from greater freedom to choose the sugar groups that they want to supply.
The complaint by Saint-Louis Sucre
France’s (...)

The Belgian Competition Authority (BCA) has rejected a request for interim measures of the Medicare-Market group*
The SA Medicare-Market (hereafter Medicare-Market) filed on 2 June 2016 a complaint against the Order of Pharmacists and requested interim measures on 28 April 2017.
The (...)

Ingushia OFAS fined “Gazprom Mezhregiongaz Pyatigorsk” Ltd. 140 million RUB*
Fines are imposed for infringing the interests of small companies
The decisions on abusing dominance were made after investigating several cases upon statements of small companies in the Republic of Ingushetia with (...)

On 16 May 2017, the General Court offered guidance on the concepts of vexatious action and abuse of regulatory procedure in the context of a judgment upholding a Commission decision to reject a complaint brought by Agria Polska and four other companies active in the parallel importation of (...)

FAS warned “Microsoft” not to create discriminatory conditions*
On 13 June 2017, FAS issued warnings to “Microsoft” to stop actions that have signs of violating the antimonopoly law (Clause 8 Part 1 Article 10 and Articles 14.2, 14.8 of the Federal Law “On Protection of Competition”). (...)

The NMCC has fined €1.74 million on Nokia Solutions and Networks Spain, S.L. (Nokia).
The NMCC considered that Nokia abused its dominant position by engaging in margin squeeze practices when the State owned railway manager Administrador de Infraestructuras Ferroviarias (ADIF) tendered the (...)

Antitrust: Commission opens investigation into gas export restrictions from Romania*
The European Commission has opened a formal investigation to assess whether Romania’s gas transmission system operator Transgaz has been hindering gas exports from Romania to other EU Member States.
The (...)

The Autorité de la concurrence examines the state of competition in the coach transport sector and dismisses the complaint lodged by TRANSDEV against SNCF*
Having been referred to by TRANSDEV GROUP (TRANSDEV) regarding practices implemented by the SNCF group in the intercity coach transport (...)

Antitrust: Commission opens formal investigation into Aspen Pharma’s pricing practices for cancer medicines*
The European Commission has opened a formal investigation into concerns that Aspen Pharma has engaged in excessive pricing concerning five life-saving cancer medicines. The Commission (...)

“Novgorodoblenergo” JSC abused market dominance*
Novgorod OFAS found that the company violated the Federal Law “On Protection of Competition”
The antimonopoly body opened a case upon complaint from “Elkom” Ltd. Prior to initiating the proceedings Novgorod OFAS issued a warning to (...)

Antitrust: Commission confirms inspections in the mobile telecommunications sector in Sweden*
The European Commission can confirm that on 25 April 2017 its officials carried out unannounced inspections at the premises of companies active in the mobile telecommunications sector in Sweden.
The (...)

On 29 March 2017, the Commission prohibited the proposed merger between the London Stock Exchange (LSE) and Deutsche Börse, almost one year after the parties first announced the deal, and on the day that the United Kingdom served notice of its intention to leave the European Union.
The (...)

The Autorité de la concurrence fines ENGIE 100 million euros for abusing its dominant position by using in particular its historical data file to convert its customers on regulated gas tariffs to market-based contracts for gas and electricity.*
Furthermore, in another case regarding ENGIE (...)

Summary:
On February 28, 2017 the Bulgarian Commission on Protection of Competition sanctioned BTV Media Group for abuse of stronger bargaining position as per Article 37a of the Bulgarian Protection on Competition Act. BTV Media Group is part of Central European Media Enterprises (...)

FAS issued a warning to “Apple Rus” Ltd.*
By 1 May 2017 the company should open a unified service centre in the Russian Federation
On 20 February 2017, the FAS Commission investigated a case against “Apple Rus” Ltd.
According to a statement received by FAS, in 2016 service centres failed to (...)

Antitrust: Commission confirms unannounced inspections in the electricity sector in Greece*
The European Commission can confirm that on 14 February 2017 its officials carried out unannounced inspections at the premises of companies active in the generation, transmission and supply of (...)

The Autorité de la concurrence conducts an initial intermediary assessment of the commitments made by Booking.com.*
The Autorité has not ruled out the possibility of issuing an opinion at its own initiative if the change in competition so requires, and is actively contributing to all of the (...)

In its confirmatory ruling issued on 8 February 2017, the French judicial supreme court (Cour de cassation, chambre commerciale, hereafter the “Supreme Court”) specifies that the concept of “undertaking” used to subject any entity engaged in an economic activity, whatever its legal form, to the (...)

Introduction
By an appeal judgment released in the SEA v AGCM case , the Administrative Court for the Region of Latium (the Court) has partially upheld the challenged decision made by the Italian Competition Authority (ICA) in Cedicor/SEA , by which the ICA fined the manager of the Milan (...)

Bundeskartellamt ends proceedings against Deutsche Funkturm after pricing structure amendments*
The Bundeskartellamt has terminated the administrative proceedings which it initiated against Deutsche Funkturm GmbH, Münster in January 2015. In the proceedings the authority investigated suspected (...)

Bulgarian Commission for Protection of Competition imposed a second sanction for abuse of superior bargaining power*
After the Bulgarian Commission for Protection of Competition (CPC) imposed a sanction on Siemens EOOD for abuse of superior bargaining position in May 2016, at the end of the (...)

In a ruling issued on November 29th, 2016, the Paris commercial court (hereafter the “court”) declared void several provisions, including price and availability parity clauses previously in force, of Booking.com’s general terms of service governing its B2B relationships with hotels.
Following an (...)

The Competition College of the BCA has rejected the application for interim measures of Alken-Maes versus AB InBev regarding the acquisition of Bosteels*
The Competition College of the Belgian Competition Authority has rejected on 21 November 2016 the application for interim measures of (...)

On 21 November 2016, the Competition College of the Belgian Competition Authority (“BCA”) rejected a request of Brouwerijen Alken-Maes (“Alken-Maes”) to suspend the acquisition of Brouwerij Bosteels (“Bosteels”) by Anheuser-Busch InBev NV (“AB InBev”).
AB InBev’s takeover of Bosteels was not subject (...)

Land available for development*
The Autorité de la concurrence recommends providing professionals and private individuals with improved access to information on the prices of lands for development.
It welcomes the recent measures taken to improve cost transparency within the sector and (...)

The Investigation and Prosecution Service of the Belgian Competition Authority has closed its investigation against Immoweb due to commitments offered by Immoweb*
On January 30 2015, the Investigation and Prosecution Service opened an ex officio investigation against Immoweb, the company (...)

This case note analyses the Turkish Competition Board’s (“Board”) Congresium ATO decision dated 27.10.2016 and numbered 16-35/604-269. The Board’s decision comes following the judgment of the Ankara 3rd Administrative Court which annulled the Board’s previous decision with respect to the same case (...)

Five fines upon a monopolist*
On 26 October, the Office of the Federal Antimonopoly Service in the Republic of North Ossetia – Alania imposed five fines upon “Sevkavkazenegro” JSC, totalling 2,812,500 RUB. The penalty is imposed for abusing dominance.
In April 2015, “Sevkavkazenegro” JSC (...)

The Belgian Competition Authority confirms the inspection at an undertaking active in the distribution and sale of infra-red cabins*
The Investigation and Prosecution Service of the Belgian Competition Authority (hereafter “BCA”) confirms that the BCA has conducted an inspection at the premises (...)

The CC fines with EUR 1.6 million two Plasterboard Suppliers of Knauf Group*
On 30 September, the Competition Council of Latvia (the CC) fined SIA Knauf and Norgips sp. z o. o. (Poland), a parent company of SIA Norgips that is also a part of a Knauf Group, for abusing their market power by (...)

Antitrust: Commission sends Statement of Objections to International Skating Union on its eligibility rules*
The European Commission has informed the International Skating Union (ISU) of its preliminary view that the ISU rules under which athletes face severe penalties for participation in (...)

Appeal Court supported FAS in a dispute with “Google”*
On 17 August 2016, the 9th Arbitration Appeal Court pronounced legitimacy and reasonableness of the decision of the Federal Antimonopoly Service (FAS Russia) on a case against “Google” abusing dominance on the market of preset application (...)

Ericsson Nikola Tesla: Initiative for abuse of dominance dismissed*
The Croatian Competition Agency (CCA) dismissed the initiative for the initiation of the infringement proceedings for the establishment of abuse of a dominant position against the undertaking Ericsson Nikola Tesla (Ericsson (...)

Antitrust: Commission accepts commitments by ISDA and Markit on credit default swaps*
The European Commission has adopted a decision that renders legally binding commitments to licence inputs for credit default swaps, offered separately by the International Swaps and Derivatives Association (...)

Antitrust: Commission takes further steps in investigations alleging Google’s comparison shopping and advertising-related practices breach EU rules*
The Commission has sent two Statements of Objections to Google. The Commission has reinforced, in a supplementary Statement of Objections, its (...)

Everything is amazing - and no-one at the European Commission is happy*
Since the European Commission (EC) announced its first inquiry into Google’s business practices in 2010, the company has been the subject of lengthy investigations by courts and competition agencies around the globe. (...)

Antitrust: Commission opens formal investigation into AB InBev’s practices on Belgian beer market*
The European Commission has opened an investigation, on its own initiative, to assess whether Anheuser-Busch InBev SA (AB InBev) has abused its dominant position on the Belgian beer market by (...)

The Autorité de la concurrence fines UMICORE, one of the global leaders in zinc, €69 million for abuse of dominant position towards its competitors by practicing during 9 years a trade policy aiming at constraining its distributors to supply themselves exclusively from the company.* In brief (...)

2015 Annual Report of the Bundeskartellamt*
Today, the President of the Bundeskartellamt, Andreas Mundt, presented the authority’s annual report for 2015.
Digital economy
New digital products and business models have created new challenges for competition policy and competition law (...)

Taxi case reaches final destination*The Swedish Competition Authority has lost its court case against Swedavia, the owner of Stockholm Arlanda Airport, for alleged abuse of dominance. The District Court has found that while there was an abuse of dominance, it was objectively justified and (...)

Bundeskartellamt publishes working paper on "Market Power of Platforms and Networks"*
The Bundeskartellamt has today published a working paper which deals with the "Market Power of Platforms and Networks" in the Internet. The report focuses on the factors relevant for assessing the market (...)

The GVH continues to monitor the hotel booking market after closing its sectoral inquiry*
The Hungarian Competition Authority (Gazdasági Versenyhivatal, GVH) prepared its report on its sectoral inquiry on the online accommodation booking market. Due to the positive changes that took place on (...)